Open letter to IBM CEO Arvind Krishna: Keep swinging the axe!

Dear Arvind:

I am very happy to read about your decision to abolish IBM’s managed services infrastructure business to make it an independent company.

I hope that through your bold move, you can start turning IBM into a customer-centric AI and data powerhouse, and these customers will not be troubled by dying businesses, which will waste resources, dilute the essential focus, and confuse customers And shut down investors.

Speaking of investors, let me show on my company the market value of those technology companies with huge influence Top 10 Cloud Wars Weekly ranking, where IBM is currently ranked seventh.

#1 MicrosofThe market value of t is $1.6 trillion

#2 Amazon Market value of 1.6 trillion US dollars

#3 Salesforce Market value reaches 237 billion U.S. dollars

#4 Google The market value reaches $1.01 trillion

#5 SAP Market value of US$185 billion

#6 Oracle Market value of US$183 billion

#7 IBM Has a market value of $117 billion (a surge in news from the spin-off)

#8 working day $53.1 billion in market value

#9 ServiceNow Market value of US$95.2 billion

#10 Adob​​e Market value reaches 235.5 billion US dollars

Therefore, although the numbers clearly speak for themselves, I just point out that IBM’s market value is:

• Even if your income is about 4 times that of Salesforce, it is only half of Salesforce’s income;
• Although your income is approximately 18 times higher, it is only 20% higher than ServiceNow; and
• It is more than twice that of Workday, which has an annual income of approximately US$4 billion, while your annual income is approximately US$75 billion.

Although your cloud revenue increased by about 30% in the last quarter, the entire market does not seem to believe that IBM can become a growth company.

Of course, investors are not the same as customers, but I believe that any customer considering mid- to high-level transactions with IBM will have a long and difficult investigation of your financial situation (including market value).

Because customers want to be consistent with the winner, the company must be driven by innovation, speed, confidence, and digital capabilities.

And I can argue that the market value of IBM clearly shows that your company has not been accepted by people because of it.

Now, again, today’s sharp rise in your stock price shows that the market is impressed by your willingness to swing the axe. And I suggest that you continue to diversify your business so that it is not completely consistent with the business. Description of the newly streamlined IBM In yesterday’s press release:

The platform helps to deploy powerful AI functions to realize the powerful functions of data, application modernization services and systems. All of this is based on security, unparalleled expertise in industry verticals, and a strong commitment to open source innovation.

Among these new priorities, no one may argue that “deploy powerful AI functions to realize the power of data”, and you will also have a strong interest in “application modernization services”.

But what followed was the key on the IBM piano, which sounded increasingly uncoordinated, delicate and inappropriate: “system”.

Take another look at the Cloud Wars Top 10 list above: Which of your peers (the company you will directly compete with in a fiercely competitive market) is investing in or still belonging to the “system”?

Well, what on earth do I know — I’m just a long mouth on his pajamas, pecking at the keyboard — but in your new cosmological array, the “system” seems to be playing the role of a black hole. Therefore, please be aware that its fascinating appeal will not attract the newly active IBM business.

I think this is very interesting. Arvind can be traced back to the history of IBM. In the earliest period of the company 110 years ago, the predecessor of IBM produced cheese slicers and meat slicers. There is no doubt that they are the right products for today and the company.

And I guess, just like hearing that many people have heard that IBM used to make food slicers before, what makes people surprised is that in the near future people will look back and think that in 2020, IBM still believes that “systems” are important The mission of becoming a hybrid cloud powerhouse is crucial.

Anyway, at least so far, I stick to the transcript I gave you three months ago Why IBM CEO Arvind Krishna’s debut quarter got an A+. As I said, I really like your work on the spin-off of the hosting service infrastructure.

However, as long as the “system” remains the core element of the “new” IBM, I think it will be difficult for you to keep A+ running.

wish all the best,

Bob